Very few people are aware of the fact that Pakistan’s Regional GDP of US$820.1 billion makes it one of the most attractive places for regional strategic investment in South Asia. Pakistan’s fifth rank among all OECD and non-OECD member countries, offshore investment centers and countries of Asia Pacific, Eastern Europe, the Former Soviet Union, Central and South America, Middle East and North America and Sub-Saharan Africa reflects our country’s suitability for regional strategic investment as far as its regional market capacity is concerned. In view of this geo-strategic superiority in regional market capacity, a very little organized professional effort in the right direction was required to attract foreign direct investment. Pakistan with cumulative foreign direct inflows of US$1246 million was ahead of India during 1988-1992. But Malaysia, Hong Kong, Thailand, Taiwan and Singapore left Pakistan far behind in foreign direct investment with FDI inflows of US$21910 million, US$7888 million, US$9454 million, US$6043 million and US$21721 million respectively. Therefore, the superiority in regional GDP is not reflected in Pakistan’s foreign direct investment inflows to which only US$1700 million have been added after 1992. Where did Pakistan go wrong?

1. ZHK
1995
Potential of Investment in Pakistan
Economic Shock Therapy for Visibly Poor but Potentially one of
the richest countries in the world
Very few people are aware of the fact that Pakistan’s Regional GDP of
US$820.1 billion makes it one of the most attractive places for regional
strategic investment in South Asia. Pakistan’s fifth rank among all
OECD and non-OECD member countries, offshore investment centers
and countries of Asia Pacific, Eastern Europe, the Former Soviet Union,
Central and South America, Middle East and North America and Sub-
Saharan Africa reflects our country’s suitability for regional strategic
investment as far as its regional market capacity is concerned. In view
of this geo-strategic superiority in regional market capacity, a very little
organized professional effort in the right direction was required to
attract foreign direct investment. Pakistan with cumulative foreign
direct inflows of US$1246 million was ahead of India during 1988-1992.
But Malaysia, Hong Kong, Thailand, Taiwan and Singapore left Pakistan
far behind in foreign direct investment with FDI inflows of US$21910
million, US$7888 million, US$9454 million, US$6043 million and
US$21721 million respectively. Therefore, the superiority in regional
GDP is not reflected in Pakistan’s foreign direct investment inflows to
which only US$1700 million have been added after 1992. Where did
Pakistan go wrong?
Zahid Hussain Khalid
Daily The Muslim
ZHK1995

2. Potential of Investment in Pakistan
By: Zahid Hussain Khalid
Published in Daily The Muslim on April 19, 1995
Very few people are aware of the fact that Pakistan’s Regional GDP of US$820.1 billion makes it one of
the most attractive places for regional strategic investment in South Asia. Regional GDP assesses a
country’s catchment area in terms of the GDP of all economies within 500 kilometers of its borders.
India with a regional GDP of US$640.3 billion is clearly far behind. Pakistan is ahead of Vietnam
(US$655.1 billion), Thailand (US$716.9 billion), Taiwan (US$559.8 billion), Hong Kong (US$505.7
billion), Malaysia (US$US$378.6 billion) and Singapore (us$157.3 billion). Pakistan’s fifth rank among
all OECD and non-OECD member countries, offshore investment centers and countries of Asia Pacific,
Eastern Europe, the Former Soviet Union, Central and South America, Middle East and North America
and Sub-Saharan Africa reflects our country’s suitability for regional strategic investment as far as its
regional market capacity is concerned.
In view of this geo-strategic superiority in regional market capacity, a very little organized
professional effort in the right direction was required to attract foreign direct investment. Pakistan
with cumulative foreign direct inflows of US$1246 million was ahead of India during 1988-1992. But
Malaysia, Hong Kong, Thailand, Taiwan and Singapore left Pakistan far behind in foreign direct
investment with FDI inflows of US$21910 million, US$7888 million, US$9454 million, US$6043 million
and US$21721 million respectively. Therefore, the superiority in regional GDP is not reflected in
Pakistan’s foreign direct investment inflows to which only US$1700 million have been added after
1992 if MOUs worth billions of US dollars are not taken into consideration which cannot be taken into
consideration because there is always room for the parties to change their minds before the actual
investment comes in. Gordon Wu’s reluctance to honor his initial commitment is a clear illustration of
this fact. Impartial analysts strongly believe that a delay in the immediate translation of these MOUs
in real investment will result in non-materialization of FDI inflow expectations. Memorandum of
understanding is, as a matter of fact, an effective bargaining instrument in the hands of shrewd

3. strategic investors who use it to explore the possibilities of better deals with other countries. Again
Gordon Wu’s attempt to strike a deal with China is an example. Where did Pakistan go wrong?
Media representatives of world’s major publications of international repute have critically watched the
formation and performance of Board of Investment which is responsible for the overseas marketing of
Pakistan’s investment potential. Right from the very beginning the Board of Investment had to work
under an unfriendly environment for two reasons: First, administratively there was a total chaos,
confusion and helplessness. Nobody knew what to do and how to do it. Secondly, the Board of
Investment, according to reliable sources on record, had received a “READYMADE, SIGNED and
SEALED PROMOTIONAL MANDATE” from Nawaz Sharif! There were three cooks, i. e. Prime Minister’s
Secretariat, ministry of industries and the top boss of BOI, who due to their acknowledged
incompetence, ignorance and lack of vision spoiled the promotional dish. This fact is reflected in front
page stories published in the leading English dailies of Pakistan in April 1993. Therefore, the country’s
political environment, politically motivated media strategy, deliberately engineered indirect
misappropriation of advertising budget and unwillingness of the BOI officials to pay any attention to
the professional advice, were some of the major reasons for a poor performance.
After the dismissal of Nawaz Sharif’s government and removal of Khalid Ishaq Dar, the Chairman and
Secretary Board of Investment announced their intention to approach strategic investors on one-to-
one basis instead of approaching them through expansive overseas media prior to the development of
an attractive investment package. This was the right approach and after the announcement of the
present regime’s Energy Policy, results of one-to-one contact approach are self-explanatory. Visible,
the Board of Investment is working on two fronts: First is the local front and the second is global. On
the local front, the Board of Investment has prepared sectoral feasibility studies which can be of
interest to foreign strategic investors on the one hand and on the other hand local investors’ interest
in investment in foreign markets is also solicited. On the global front, Board of Investment is using
Pakistan’s geo-strategic capacity as a strategic investment attraction.
This brief background information clearly indicates that visibly there is nothing wrong with Board of
Investment’s strategy to effectively market Pakistan’s regional/global strategic investment potential.
Then why has Pakistan failed to outperform Malaysia, Hong Kong, Thailand, Taiwan and Singapore in

4. foreign direct investment inflows? The real attraction of Pakistan’s Regional GDP is diluted by unrest in
Afghanistan and Kashmir. Law and order situation in Karachi has also forced the committed investors
to reconsider Pakistan as an investment option.
At the moment, the government of Pakistan and Board of Investment are helpless as far as this aspect
of the problem is concerned. Unfortunately, the government is not dealing wisely with the business
community also. Another visible drawback is the politicization of overseas promotional campaigns in
print and electronic media which leads to the misplacement of media message. In this age of
specialization, generalization of message through general interest media backfires because unlike
Pakistan the foreign global investment managers consider an invitation for investment through
politically influential newspapers and magazines as politically motivated non-serious message meant
to influence / impress politicians. They do not take the message seriously. It is ironic that the present
government has also released advertisements to hostile print media which can not be influenced by
such bribes.
It is the responsibility of our politicians in power to realize that the country’s projection is more
important than personal projection because regional and global strategic investors are not interested
in personalities. At least Benazir, who gets more unpaid media attention than paid publicity, must
convey this fact to her media managers. On top of other drawbacks, for which the Board of
Investment cannot be held responsible, are invisibility of any serious endeavor to extinguish the
flames of armed struggle for political power in Afghanistan and to initiate dialogue with India on
Kashmir dispute. It is Pakistan’s own interest to do whatever is possible to put an end to the civil war
in Afghanistan and unrest in occupied Kashmir as early as possible. Only MOUs will not serve any
purpose. Pakistan needs immediate foreign direct investment inflows. Peace is the first priority as far
as investment options are concerned. Pakistan, unfortunately, for unknown reasons is not paying any
attention to this priority.
A casual glance at other factors, like economic strength, infrastructure and resources, political and
credit risk which make a country’s investment potential more attractive, endorses the much
emphasized need for shock therapy badly needed by the economy of this visibly poor but potentially
one of the richest countries in the world.

5. The following options are available to the government of Pakistan and the Board of Investment to
make the conversion of MOUs into project implementation documents possible and to attract new
strategic investors:
1. Sponsor a research project designed to study the individual, bi-lateral, multi-lateral, regional and
global socio-economic potential of the major countries of the world, to evaluate their socio-
economic indicators to determine the level of their performance and the gap between their
potential and performance to find how strategic regional and global investment in Pakistan can
help the regions and the world to narrow or bridge the gap between their potential and
performance.
2. Seriously work on geo-strategic and geo-economic scenarios to illustrate the extent of economic
loss as a consequence of armed struggle for political power in Afghanistan, unrest in occupied
Kashmir and diplomatic, strategic and political tension between India and Pakistan.
The government of Pakistan will itself has to work on these options and then approach the strategic
institutional investors to exert their pressure on the parties involved in the conflict to sit together and
find out a solution to the problem which has economically handicapped the smooth functioning of
SAARC and ECO. If the needful is not done in the near future then not only Pakistan but the member
countries of the two regional alliances/blocs will suffer serious economic losses.
Unfortunately that was in 1995. Benazir Bhutto was Prime Minister of Pakistan.
Now it is 2012. Benazir Bhutto’s husband is President of Pakistan and the
government is run by his visionless, incompetent puppet.
Is there any difference in the way the government and affairs of the State are
managed in 2012 than they were in 1995?
No? Why?
There is no difference because people are victim of monstrous STATUS QUO and
are criminally INDIFFERENT. They do NOT REACT.
I am available at: zahidhkhalid.research@gmail.com